Quick Answer
A member firm generally may not pay transaction-related compensation to a person who is not registered as a broker-dealer, when the payment and the recipient's related activities would require broker-dealer registration. The test looks at what the person actually does, not just at the compensation label.
This topic asks whether an unregistered recipient's compensation and related activities require broker-dealer registration.
Does the Payment Require the Recipient to Be Registered?
- The prohibition applies when the payment and the recipient's related activities require broker-dealer registration.
Exam Tip: Gotchas
- Unregistered status alone is not the complete test. Ask whether the compensation and the recipient's related activities require registration.
What Should You Check on Exam Day?
- Identify the payment, recipient, and activities tied to compensation.